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Dynamic Oligopoly Pricing with Asymmetric Information: Implications for Horizontal Mergers / Andrew Sweeting, Xuezhen Tao, Xinlu Yao.
- Format:
- Book
- Author/Creator:
- Sweeting, Andrew.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w28589.
- NBER working paper series no. w28589
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2021.
- Summary:
- We model differentiated product pricing by firms that possess private information about serially-correlated state variables, such as their marginal costs, and can use prices to signal information to rivals. In a dynamic game, we show that signaling can raise prices significantly above static complete information Nash levels, even when the privately observed state variables are restricted to lie in narrow ranges. We calibrate our model using data from the beer industry, and show that our model can explain changes in price levels, price dynamics and cost pass-through after the 2008 MillerCoors joint venture.
- Notes:
- Print version record
- March 2021.
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